‘All time high’: No end to Asia’s cocoa craze as Olam lists three factors driving market growth
According to the Olam Cocoa researchers, chocolate demand at a global level will continue to rise across the next five years due to a ‘positive economic outlook which leads to higher levels of disposable income that can be spent on treat purchases’.
“In 2018, global chocolate consumption was recorded at 6 million metric tonnes, an increase of 2.5% over the past five years. A massive driver of this global demand for chocolate comes from Asia.” they said.
Three key contributing factors have been identified as major drivers for this growth.
1) Cocoa powder is an exceptionally strong sector in Asia
The first trend observed is that cocoa powder is currently seeing record-breaking high demand in Asia.
“Demand for cocoa powder in particular is at an all-time high in Asia and is set to increase with a 5-year CAGR projection of 8%,” said Olam Cocoa.
Within the region, this is being led by China, India, Japan and the Philippines.
The company bought an 85% stake in Indonesia’s largest cocoa supplier Bumitangerang Mesindotama (BT Cocoa) for US$90mn in recognition of this trend, as BT Cocoa already has a successful range of cocoa powders.
Olam Cocoa also launched its value-driven Huysman cocoa powder brand last year.
2) Asia as second largest cocoa consumer globally
The researchers also predicted that Asia is on track to become the second largest consumer of cocoa ingredients in the world.
“[Although] cocoa consumption [was] driven by Europe and America for most of the last century, [rising] disposable incomes, improved retail distribution and the growing availability of international brands [have pushed Asia forward in this market],” they said.
The use of cocoa in snack food categories like sweet biscuits and chocolates was also predicted to contribute significantly to growth, as these categories accounted for some 40% of new product development in the region last year.
3) Indonesia as the ‘crown jewel’ of Asia’s cocoa market
Indonesia was also recognised by the researchers as the key contributing nation to the growth of cocoa in the region.
Apart from Olam Cocoa, many other cocoa companies such as Musim Mas and Barry Callebaut have significant acreage of plantations in the country.
“Indonesia is currently the sixth largest cocoa producing country in the world and has a total population of around 250 million people, offering a huge consumer base for chocolate and confectionery manufacturers,” they said.
Chocolate observations in Asia
In China in particular, the incorporation of chocolate into local food applications has previously been lauded as ‘key to achieving market success’ by Barry Callebaut China Managing Director George Zhang.
“Ice-cream has become the most popular application of chocolate currently. Five years ago, it was the vanilla flavoured ice-cream that was winning consumers. The Chinese prefers to consume chocolate in different forms, not just sweets alone, but in bakery, cakes, and local food applications,” he said.
Chocolate has also been seen to be a major player in what research firm Mintel deems ‘flavour migration’ in Asia, where flavours that were first conceptualised in other regions have found their way over.
This was particularly obvious in salty snacks, where the Asia Pacific region launched some 58% of all chocolate-flavoured salty snacks globally in 2018, with most of these coming from Japan (12% of all global launches).
“Chocolate—be it dark, milk, or white, on its own or with other ingredients—has moved into salty snacks, bridging the sweet-savoury divide. [It] has lent itself well to the ‘sweet and salty’ taste that is becoming popular across the world, and more recently in Asia,” Mintel Food and Drink Director of Insight Marcia Mogelonsky said.